Social Security increases payments to former govt employees.

[JDCrimson]

If we had 6 laws to regulate pillows we might not have had to deal with Mike Lindell the last 10 years...

The EU has grown to include so many countries that consensus on any issue will be difficult.
Bureaucrats in Brussels interpreted that as carte blanche to enact whatever crazy insulting policies they wanted and cram those policies down the throats of the member states. (One crazy example is that the EU has six laws regulating pillows. Why does an economic union like the EU need a single law on pillows, much less six?).
The EU has become the culmination of the Progressive dream of the rule of the "experts," and it turns out the "experts" are not appreciably brighter than their subjected peoples. The "experts" just have a different set of priorities and interests.
NATO, on the other hand, is functionally limited to defense and security, so there is a built-in mechanism to prevent the organization from doing something beyond its remit. If NATO tries to adopt a law regulating pillows, any single member can veto on the basis of pillows having nothing to do with defense and security.

 

[4Q Basket Case]

Earle’s right. The tariffs aren’t about anything other than massaging Trump’s need to exercise power. Their ostensible purpose never works.

They will increase prices (i.e., create inflation), which will eliminate any reason for the Fed to decrease interest rates. *. At a macro level, they will also decrease corporate sales and/or increase costs. Either way, they will decrease profits, which will in turn trash stock prices.

Trump is looking only to feel like he’s the smartest guy in the room. Given the clowns he’s assembled around him, he might actually be right on that point.

* Keep in mind, the Fed controls only the overnight Fed Funds interest rate. It has only very indirect control over longer term rates.

Even that indirect relationship assumes that the Fed’s view of the short term and long term economic outlook is in at least kinda-sorta passable alignment with the market’s. If that’s not the case, you can easily have a disconnect.

IOW, the longer-term interest rates are market-driven. Most often, the overnight rate sets the base level on which longer-term rates are built. So while the Fed doesn't set longer-term rates, it can influence them -- usually.

But suppose the market calls garbage on the assumptions underlying the short-term interest rates set by the Fed. The market then sets its own longer-term rates that disregard the Fed -- and in this case, "longer term" means anything longer than overnight. If that happens, there’s nothing the Fed or Trump or anybody else can do.

 

[UAH]

Earle’s right. The tariffs aren’t about anything other than massaging Trump’s need to exercise power. Their ostensible purpose never works.

They will increase prices (i.e., create inflation), which will eliminate any reason for the Fed to decrease interest rates. *. They will also decrease corporate profits, which will in turn trash stock prices.

Trump is looking only to feel like he’s the smartest guy in the room. Given the clowns he’s assembled around him, he might actually be right on that point.

* Keep in mind, the Fed controls only the overnight Fed Funds interest rate. It has only very indirect control over longer term rates.

Even that indirect relationship assumes that the Fed’s view of the short term and long term economic outlook is at least in kinda-sorta passable alignment with the market’s. If that’s not the case, you can easily have a disconnect.

IOW, the longer term interest rates are market-driven. Most often, they are influenced a bit by overnight rates. But if the market calls garbage on the short-term interest rates set by the Fed, and sets its own rates that disregard the Fed, there’s nothing the Fed or Trump or anybody else can do.

I believe the Bond vigilanties have already spoken in terms of discounting the long treasury. The rubicon has been crossed. There will be a big price to pay in inflation to bring down rates. The Brics are massively hoarding gold to back a cryto currency to support inter Bric Trade. Trump can thump his chest but he doesn't have the power that he thinks he does.

 

[Tidewater]

I believe the Bond vigilanties have already spoken in terms of discounting the long treasury. The rubicon has been crossed. There will be a big price to pay in inflation to bring down rates. The Brics are massively hoarding gold to back a cryto currency to support inter Bric Trade. Trump can thump his chest but he doesn't have the power that he thinks he does.

Paul Volcker had to raise rates obscenely high to kill inflation, but, after a bad recession, got it done.
I would not want to experience that inflation-recession cycle again.

 

[4Q Basket Case]

Paul Volcker had to raise rates obscenely high to kill inflation, but, after a bad recession, got it done.
I would not want to experience that inflation-recession cycle again.

I agree. But I don't think anyone since Ronald Reagan (fresh off a 44-state victory over an incumbent Jimmy Carter), would have the political clout to do that. And I don't see anybody of that political stature in either party.

Plus, that was 45 years ago. Anyone old enough to remember that time and fully understand it would be in their mid-60s now -- like us. To younger folks, the oil embargo, hours in line to pay the current equivalent of $5 to $6 for gasoline, double-digit unemployment (when the labor market participation rate was far higher than it is today), and car and home loans with interest rates 10% and higher, might as well be Homer and Plato.

 

[UAH]

Paul Volcker had to raise rates obscenely high to kill inflation, but, after a bad recession, got it done.
I would not want to experience that inflation-recession cycle again.

It is obvious that Trump did not understand the position of US Debt in the global bond market and the adverse reaction to his big beautiful bill in the way it explodes US deficits and debt service. It would require a great deal of expert analysis but I suspect that Volker's intervention was much less painful than what the US must eventually come to grips with!

 

[Tidewater]

I agree. But I don't think anyone since Ronald Reagan (fresh off a 44-state victory over an incumbent Jimmy Carter), would have the political clout to do that. And I don't see anybody of that political stature in either party.

Plus, that was 45 years ago. Anyone old enough to remember that time and fully understand it would be in their mid-60s now -- like us. To younger folks, the oil embargo, hours in line to pay the current equivalent of $5 to $6 for gasoline, double-digit unemployment (when the labor market participation rate was far higher than it is today), and car and home loans with interest rates 10% and higher, might as well be Homer and Plato.

I remember running into my father's mortgage statement (he bought a home in 1977 or thereabouts) and the mortgage rate was 13.9%.

 

[Tidewater]

Update.
According to FRED, the 30-year fixed mortgage rate in the US in 1981 was 18.53%.
30-year fixed.
Think that was painful?
That is what it cost to kill inflation last time.

 

[UAH]

Update.
According to FRED, the 30-year fixed mortgage rate in the US in 1981 was 18.53%.
30-year fixed.
Think that was painful?
That is what it cost to kill inflation last time.

Some of us lived that. Convential loans were 11% - 14% in 1981. Bank CD's were 10.5% if you were lucky enough to have money in the bank. We negotiated labor agreements with 6.0% - 6.5% annual increases. Home builders were essentially out of business. Unemployment in the midwest hit 10% as a result of the recession that emerged in 1981. A lot to condider in the way Volker went about killing the inflation monster! Some of us would contend that the Fed has generally been a wreck since Volker departed.